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More trouble for the IRS

The new acting IRS chief acknowledged Friday that an upcoming audit would find improper spending at an agency conference, opening up a new trouble spot for an agency already embattled over its treatment of Tea Party groups.

Danny Werfel, the acting commissioner, said that the conference occurred in 2010, labeling it an “unfortunate vestige” from a time before the agency tightened its belt.

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“While there were legitimate reasons for holding the meeting, many of the expenses associated with it were inappropriate and should not have occurred,” Werfel said in a statement.

But House Oversight Chairman Darrell Issa (R-Calif.), who is already investigating the agency’s singling out of conservative groups, made clear that he would be taking a deep look at the conference spending as well.

House Oversight is holding a hearing on the IRS’s conference spending on Thursday, a development Issa said illustrated broader issues within “an agency in crisis.” Werfel said he expected Treasury’s inspector general for tax administration to release its report on Tuesday.

“The American people expect that their tax-dollars will be used responsibly and not for financing lavish hotel suites and entertainment for government employees,” Issa said in a statement. “The Oversight Committee will examine these egregious abuses of the public trust and an IRS culture that shuns accountability."

In fact, problems cropped up for the IRS on several fronts Friday – including the continued congressional investigation into the targeting of tax-exempt applications – all of which underscored the difficult task that awaits the agency’s new acting leader.

The number of times the former IRS commissioner, Doug Shulman, visited the White House also continues to draw scrutiny, especially from Republicans.

Werfel, who will make his first appearance before lawmakers in his new role on Monday, said the sort of spending that occurred for the 2010 conference would be inconceivable now.

Travel and training costs have already dropped roughly 80 percent since that conference occurred, the acting commissioner said, as he vowed to continue to keep a close eye on those expenses.

Werfel finished off his first full week as acting commissioner on Friday, and is currently in the midst of a top-to-bottom examination of the agency that was ordered by Treasury Secretary Jack Lew.

"Cutting down on excessive and inappropriate travel has been a personal priority for me," said Werfel, a former senior official at the Office of Management and Budget.

But the IRS’s conference spending also appears to have played a role in reviving an older controversy as well, with the House Ways and Means Committee’s release of an agency-produced dance video.

A GOP staffer said it was aides’ understanding that the dance video – along with a previously released Star Trek spoof that lawmakers in both parties found wasteful – was produced for the 2010 conference in California that will play a major role in the upcoming inspector general’s report.

“Whether it is the tens of thousands of hard-earned taxpayer dollars spent to produce frivolous entertainment for agency bureaucrats, or the IRS’s own admission that it targeted the American people based on their personal beliefs, the outrage toward the IRS is only growing stronger,” Rep. Charles Boustany (R-La.), the chairman of the Ways and Means oversight subcommittee and frequent IRS critic, said in a statement.

“Clearly this is an agency where abuse and waste is the norm and not the exception.”

On Friday, staffers for the top lawmakers on the Senate Finance Committee also sharply criticized the agency for blowing past a document request deadline about the agency’s targeting of conservative groups, as lawmakers prepare to return to Washington and jump-start their investigation.

IRS staffers have told lawmakers and congressional staffers that they’re working to comply with broad requests for information from Capitol Hill over the agency’s singling out of applications for tax-exempt status.

But aides to Senate Finance Chairman Max Baucus (D-Mont.) and the panel’s ranking member, Sen. Orrin Hatch (R-Utah), said that sort of response wasn’t good enough.

The Finance Committee had asked the IRS last week to give it phone logs, emails, calendars and other documents that would shed light on, among other things, what conversations IRS staffers had with the White House.

“It’s disappointing that the IRS failed to produce any of the documents requested by the committee,” the press offices for Baucus and Hatch said in a joint statement. “This is an agency that revolves around making the American taxpayer meet hard deadlines each and every year when they file their taxes, oftentimes penalizing those that are late.”

“The IRS needs to do much better,” the statement added.

IRS officials have also not handed over documents to Ways and Means Chairman Dave Camp (R-Mich.) and Rep. Sandy Levin (Mich.), the panel’s top Democrat, who asked for similar information by May 21.

Even so, the congressional investigation into the agency is set to intensify next week, starting with Werfel’s Monday appearance before a House Appropriations subcommittee.

The IRS has also told House Republicans that close to 90 agency staffers could have documents related to the scrutiny given to conservative groups, a congressional aide said, confirming a finding first reported by CNN.

Ways and Means will also hold its second hearing into the IRS targeting on Tuesday, featuring some of the groups who received added attention from the agency.

Meanwhile, Republicans continue to keep an eye on Shulman’s visits to the White House, after reports circulated that the former commissioner appears more than 150 times on visitor logs.

Still, it remains an open question how often the IRS commissioner actually went to the complex. Most of Shulman’s documented visits on the log occurred at a neighboring office building, and he was often cleared for seemingly regularly scheduled meetings on how to implement President Obama’s signature healthcare law.